Austin apartment tally: 19,767 units coming soon and more to follow

Apartment occupancy remains high and rents continue to rise throughout the Austin market but a big question mark lurks in the months ahead, according to the latest quarterly Austin Multifamily Report published by Austin Investor Interests LLC.

Will so much new multifamily construction lead to high vacancy rates and increased competition for rent dollars?

That’s what Robin Davis, manager of Austin Multifamily Report, is wondering, given that 17,627 units currently are under construction and another 2,140 are poised to start.

“Occupancy may fluctuate with the onset of new units, while rents are anticipated to continue their climb but perhaps at a diminishing pace of that seen in the last two years,” Davis wrote in the report.

During the first quarter of 2014, occupancy rates came in at 94 percent, a drop of 0.85 percent from the previous quarter. That puts the annual decrease at 1.14 percent, which is the largest drop since 2009.

Rental rates, however, increased 1.44 percent during the quarter to an average of $1.20 per square foot across all classes of properties. The cost of living downtown in a new apartment far exceeds that average. Rent in the Central Business District average $2.51 per square foot.

Most Class A properties available in the suburbs are far cheaper than downtown rates, however. The average rent at Class A properties — that is those with units delivered in the past few years — is $1.36 per square foot, which is up 2 percent for the quarter and 7 percent for the year. Older Class B and C properties are both averaging $1.15 per square foot.